"S" Corp KSOP

[vebaguru]

We are in process of setting up a KSOP for a new "S" corp. Certain issues have arisen that I would like responses to. Unfortunately I am in a smaller market and there are no firms specializing in ESOPs here, so we have to try to come up with the answers:

1. Have the securities offering issues relating to offering stock to employees through a KSOP? For unregistered stock, is an offering circular required? Is registration of stock required if there are more than 35 participants?

2. Are the ERISA 404© protections wiped out when employer stock is offered as an option under a 401(k) plan?

Thanks for any guidance you may provide.

[RLL]

Hi vebaguru ---

If there are no firms there that specialize in ESOPs, retain an out-of-town expert. You can find referrals through The ESOP Association at www.esopassociation.org and the National Center for Employee Ownership at www.nceo.org.